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Your Complete Guide to Smarter -
Lower-Cost Investing in 2026
25 bps robo-advisory fee
Daily AI driven Portfolio Insights
Systematic ETF Automated Investing

Built for First Time Investors
Self-Employed
Families
High Net Worth Individuals
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Accounts for Kids:

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go to:  Frequently Asked Questions - FAQ
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Getting Started
Getting Started with CleverAlpha

Setting up takes minutes — no wet signatures, no snail mail.

Here’s exactly how 
You Key Questions Answered Here:

What is a robo advisor and why is CleverAlpha more “robotic” than most?

We are a computer-driven, rules-based system that is more systematic than traditional managers who still use some discretion. We scan the entire ETF universe for the lowest fees we can find so you more of your money and your money compounds harder.

Is there a minimum to open an account?

Nope. $1/month minimum fee only for accounts under $5,000.

How do I open an account?

Click “Open Account” → 100% digital onboarding → invested same (or next day).
 
Fees That Actually Save You Money

CleverAlpha's fees are only 
0.25% per year (accounts under $5,000 are charged at $1 per month). That is just $25 per $10,000 invested.
Includes everything - rebalancing, custody, trading, AI driven reporting. No hidden fees.

the Key takeaway:
Most low fee “robo” advisors charge about the same, but which on-line digital advisor can give you daily AI deconstruction + systematic rules-based rebalancing at this transparency level?
CleverAlpha Fee
How Our Systematic ETF Portfolios Work:
The Algorithm - Our Automated Investment Strategy

Globally diversified across stocks, bonds, real estate, commodities and even bitcoin.

Daily monitoring + systematic rebalancing to your risk target and time horizon.

We seek to choose the lowest-fee ETF in each investment category.

Your portfolio is built for your goals and comfort level with risk — then we seek to enhance and protect your returns daily.
The Algorithm - Our Automated Investment Strategy
Daily AI Portfolio Insights

Our AI Advisor goes far beyond basic robo tools. It actively works for you every day. In fact, we ask our AI to check and report on your portfolio every day.

About Your Portfolio — Every Day

You now have an AI - a Large Language Model -at your disposal to review individual holdings and your entire portfolio holistically. Available daily for deeper understanding of performance, risk, and opportunities. Data-secure and privacy-first.

 

What our AI Advisor  does:
 

Daily deconstruction & insights

Uses large language models to explain performance, risk exposure, and hidden opportunities in plain English. A privacy-first use of AI where your personal data is anonymized that delivers time-weighted-returns for a personalized performance analysis versus benchmarks and includes the impacts of current market events.
 

Smart tax scoring & asset location

The 2 main headwinds  to investing is volatility and taxes. So the goal is to use our asset allocation algorithm to control your exposure to volatility while locating your assets into the accounts that can best shoulder their tax exposure.

Our AI automatically ranks your target model portfolio holdings by tax efficiency and recommends placement across taxable, IRA, Roth, etc. to minimize your tax bill without changing your overall allocation - ensuring you are not overly concentrated by duplicating the same allocations across all of your accounts.*

*this is an enhanced service and may cost more than our standard robo service. Click HERE to learn more from our Customer Relationship Summary.
 

Personalized account interview

Guided conversation that asks about age, marital status, dependents, state residency, income, net worth, risk tolerance, time horizon, contributions, and withdrawal needs — then recommends exactly which accounts you should open and fund (Roth IRA, SEP, 529, Trump Account, etc.). 

Click HERE to meet our AI ADVISOR.

 

Result: Clearer portfolio understanding + lower taxes + the right accounts for your life.


Benefits include:
​​
  • Daily AI deconstruction
  • Actionable insights
  • Holistic portfolio analysis
  • Proper bench-marketing against like for like bell-weathers

 
Daily AI Portfolio Insights
AI Advisor
Question: What accounts does CleverAlpha support?

Answer: Most (pretty much all) retail investment accounts: taxable brokerage accounts, retirement accounts and accounts for children - to suit all your financial goals.

Build your wealth with flexible investment options designed to fit your life stage, income, and tax strategy. We support a full range of individual and retirement account types so you can invest, save, and plan for what matters most.
 
  • Taxable Brokerage Account
    • For general investing with no contribution limits
    • Flexible access to your funds, capital gains treatment, and dividend reinvestment options
      ​
  • Traditional IRA / Rollover IRA / Spousal IRA​
    • Potential pre-tax retirement contributions up to $7,000 for 2026
    • $8,000 total limit for those age 50+ with catch-up contributions
    • Tax-deferred growth until withdrawal
      ​
  • Roth IRA / Custodial Roth IRA
    • Contributions made with after-tax dollars; qualified withdrawals are tax-free
    • Same limits as Traditional IRA: $7,000 (or $8,000 with catch-up) in 2026
       
  • SEP IRA (Self-Employed and Small Business Owners)​​
    • Contribute up to 25% of net earnings, capped at $71,000 for 2026
    • Simple setup, flexible contributions, and full employer deductibility
      ​
  • SIMPLE IRA (For Small Employers)
    • Employee salary deferrals up to $17,000, plus $3,500 catch-up if age 50+
    • Employer contributions via 3% match or 2% fixed contribution
      ​
  • 529 College Savings Plan​
    • Save for education with tax-free growth and potential state tax deductions
    • Use funds for tuition, fees, and qualified K‑12 or higher‑education expenses
      ​
  • Custodial Roth IRA, UGMA Account, Trump Accounts (coming soon)​
    • Give minors a head start with tax‑advantaged investment growth
    • Flexible access for education, first home, or future goals

 

Our Free Tools – Instant Answers & Projections

  1. Retirement Planning Assessment — See if your savings + contributions will last in retirement. Takes 2 minutes. [Try it →]

  2. Rollover Decision Support — Should you roll your old 401(k) into an IRA? Get step-by-step guidance. [Try it →]

  3. Child Investment Account Calculator — Best account for your child (Roth, UGMA, 529, Trump)? See growth projections. [Try it →]

  4. 529 Analyzer — Does your state give a tax break on 529 contributions? Get your exact savings estimate. [Try it →]

  5. Social Security Calculator — Claim early or delay? See breakeven age and lifetime totals. [Try it →]

  6. Advisor Fee Comparison — How much you save switching to 0.25% CleverAlpha fees. 10-year compounding view. [Try it →]

 

All tools are free, no login required.

​

  • Question: What does CleverAlpha’s AI Advisor actually do for my portfolio and how can it help me with my investments?

  • Answer: CleverAlpha’s AI Advisor delivers daily, high-value insights that help you understand your investments — all while keeping your data private and fully SEC-compliant.

    • Account performance reporting: Breaks down your holdings, analyzes risk, and explains performance using large language models. Delivering Time Weighted Returns (TWR) so you can understand how much alpha we as your investment manager are delivering via our proprietary investment algorithm.

    • Intelligent tax scoring & asset location: Automatically evaluates every asset for tax efficiency. Tax-inefficient holdings (e.g., bonds, REITs, high-turnover funds) are prioritized for tax-advantaged accounts (IRAs, 401(k)s), while tax-efficient assets stay in taxable accounts — reducing your overall tax burden without changing your target allocation.

      • The result: clearer understanding of your portfolio + smarter tax-aware placement across all your accounts.

    • Personalized account recommendations: Takes you through a guided conversation that considers your age, marital status, dependents, state of residency, income, net worth, risk tolerance, time horizon, contribution ability, and distribution requirements — then recommends exactly which account types (e.g., Roth IRA, SEP IRA, 529, taxable brokerage, custodial accounts) you should open and fund to optimize taxes, growth, and access.

  • Question: Will my current savings and future contributions be enough for me to retire comfortably?

  • Answer: Our free Retirement Planning Assessment tool instantly tells you whether your current savings, planned contributions, expected returns, and target retirement age will support the lifestyle you want in retirement. It runs the full projection in under 2 minutes and gives clear recommendations — including any gaps and how to close them.
    Try the     Retirement Planning Assessment Calculator →
     

  • Question: Should I roll over my old 401(k) into a Rollover IRA, and how do I decide?

  • Answer: Yes (possibly) — most people should roll over their old 401(k) into a Rollover IRA. Rolling over avoids immediate taxes and penalties, can give you full control over investments, and may reduce fees compared to leaving the money in an old employer plan. Its about finding the right home for your retirement plan that doesn't cost more and offers you more investment options.

  • Question: What is the best investment account to open for my child?

  • Answer: The best account depends on your goals, but the top choices are:

    • Custodial Roth IRA — tax-free growth and withdrawals if your child has earned income (ideal for long-term wealth building).

       

    • UGMA/UTMA custodial account — flexible gifting with no income requirement, but taxable and child gains control at age of majority.

    • 529 college savings plan — education-focused with potential state tax deductions/credits and tax-free growth for qualified expenses.

    • Trump Accounts – Give Your Child a $1,000 Head Start

      • Question: What is a Trump Account and how can CleverAlpha help?

      • Answer:

        • Trump Accounts are new tax-advantaged investment accounts for kids under 18 (created by the 2025 One Big Beautiful Bill Act).

        • Eligible U.S. citizen children born 2025–2028 receive $1,000 from the U.S. Treasury at launch — invested in low-cost U.S. stock index funds/ETFs. Parents, family, or employers can add up to $5,000/year (tax-deferred growth).

        • At age 18, the account converts to a traditional IRA: flexible use for education, first home, business startup, or retirement — with the same tax rules.

        • CleverAlpha makes it simple: open and manage your child’s Trump Account digitally, get automated low-cost investing (our standard 0.25% fee applies), plus our tools for projections and tax-aware planning.

        • Key benefits at a glance

      • Free $1,000 seed money (2025–2028 births)

      • Tax-deferred growth on all contributions

      • No income or earned-income requirement

      • Long-term compounding potential (estimates: $100k+ by 18 with modest additions)

      • Open or Learn More About Trump Accounts with CleverAlpha →

    • ​Our free Child Investment Account Calculator compares these options based on your child’s age, your state, income goals, and timeline — then shows projected growth and recommends the best fit for your family.

    • Explore the best fit with the Child Investment Account Calculator →
       

  • Question: How do these accounts for children compare?

  • Answer:​​

Contribution Ordering (Rule of Thumb)

  1. Claim "Free" Money: Enroll in the Trump Account for the $1,000 seed and any employer program matches.

  2. Education Goals: Direct additional dollars to a 529 plan up to the expected college cost, creating tax-free withdrawals.

  3. Earned Income: If the child works, fund a Custodial Roth IRA up to their earned income in 2026 is capped at $7,500 per year.

  4. "Extra" Savings:

  • Trump Account: For long-term/retirement funds (tax-deferred, ordinary income tax later); however, today for 2026 is capped at $5,000 per year.

  • UGMA: For flexible funds accessible at the child's state's age of majority (18-21) and there are no caps on contributions.

​​

Comparative Matrix: Accounts for Kids

This content is provided for informational purposes only and should not be construed as financial, legal, or tax advice. All information is subject to change without notice. We strongly recommend that you verify all data and consult with a qualified professional before making any investment or financial decisions.

Important Disclosures and Risk Information

 

General Investment Disclosure

This document is for informational and educational purposes only and does not constitute a recommendation, offer to sell, or solicitation of an offer to buy any specific security or financial product. Any "Rule of Thumb" strategies are hypothetical illustrations and may not be suitable for all investors. Financial figures, such as contribution limits for 2026 (e.g., $7,500 for Roth IRAs and $5,000 for Trump Accounts ), are projections based on current or proposed legislation and are subject to change, inflation adjustments, and legislative approval.

 

No Tax or Legal Advice

CleverAlpha does not provide tax or legal advice. This material contains information regarding tax-advantaged accounts, including “Tax-Free Rocket” (Roth IRA) and “Deferred & Seeded Vault” (Trump Account)  concepts. Tax laws are complex and subject to change. Clients should consult with their own tax or legal professional regarding their specific situation before making any investment decisions.

 

Product-Specific Disclosures​

​

Trump Accounts:

  • Legislative Risk: The "Trump Account" and specific provisions such as the $1,000 government seed for children born 2025–2028 and Section 128 employer programs  refer to specific legislative proposals or statutes. Eligibility, contribution limits, and tax treatment are contingent upon the final enactment and interpretation of such laws.

  • Tax Treatment: Unlike Roth accounts, distributions from these accounts are taxed as ordinary income.

  • Liquidity Restrictions: Funds are generally locked and inaccessible until the calendar year the beneficiary turns 18.

​

529 College Savings Plans:

  • Investors should consider the investment objectives, risks, and charges and expenses associated with municipal fund securities before investing.  More information is available in the issuer's official statement or plan description.

  • State Tax Benefits: Depending on your state of residence, there may be an in-state plan that offers tax and other benefits (such as matching grants, scholarships, or creditor protection) that are not available through an out-of-state plan.

  • Non-Qualified Withdrawals: Earnings on withdrawals not used for qualified education expenses are subject to federal income tax and a 10% federal penalty. State taxes and penalties may also apply.

​

Custodial Roth IRAs:

  • Earned Income Requirement: Contributions to a Custodial Roth IRA are strictly limited to the minor’s earned income. Contributions cannot exceed the lesser of the annual limit or the child’s total earned income for the year.

  • Withdrawal Restrictions: While contributions may be withdrawn tax-free, earnings withdrawn prior to age 59½ and before the account has been open for five years may be subject to taxes and a 10% penalty.

​

UTMA/UGMA Accounts:

  • Irrevocable Gift: Assets transferred to a UTMA/UGMA account are irrevocable gifts to the minor. The custodian must manage the assets for the minor's benefit until the age of majority (typically 18 or 21), at which point the beneficiary gains full control of the assets.

  • Financial Aid Impact: Assets in UTMA/UGMA accounts are generally considered assets of the student for federal financial aid purposes (FAFSA), which may have a higher impact on financial aid eligibility compared to assets held in 529 plans or retirement accounts.

    

Asset Class Risks

All investments involve risk, including the possible loss of principal. "Growth" strategies  imply investment in equities, which may be volatile. Historical performance does not guarantee future results.

The Account Types We Support
Our Free Tools for You to Use
Comparison of Accounts for Children
Accounts for Children
​

  • Question: Does my state offer a tax deduction or credit for contributions to a 529 college savings plan?

  • Answer: Yes — many states provide a state income tax deduction or credit for 529 contributions, often ranging from $2,000 to $10,000+ per year (or per beneficiary), depending on your income, filing status, and state rules. Some states offer credits even if you don’t itemize.

    • Our free 529 College Savings Plan Analyzer instantly checks your state’s current rules, estimates your exact tax savings, and compares in-state vs. national/out-of-state plans so you can choose the one that maximizes your benefit.

    • See your exact tax savings and plan comparison with the 529 College Savings Plan Analyzer →
       

  • Question: Should I claim Social Security early for longer payments or delay for a higher monthly amount?

  • Answer: Delaying Social Security usually maximizes lifetime benefits if you live past average life expectancy (around 80–82), because each year you wait past full retirement age increases your monthly benefit by up to 8%. Claiming early makes sense if you need cash flow now, have health concerns, or expect a shorter lifespan — you’ll receive payments for more years, even if each check is smaller.

    • Our free When to Take Social Security Calculator analyzes your exact situation (current age, earnings history, spousal/survivor benefits, life expectancy assumptions) and shows:

      • Your breakeven age

      • Total lifetime benefits for claiming at different ages (62, full retirement age, 70)

      • Best strategy to maximize income

      • Get your personalized breakeven analysis and optimal claiming age in minutes.

    •   Find your optimal strategy with the When to Take Social Security Calculator →
       

  • Question: How much can I save in advisory fees by switching to CleverAlpha?

  • Answer: Clients can save significant dollars a year — CleverAlpha charges only 0.25% per year (25 basis points), with a $1/month minimum for accounts under $5,000, compared to typical traditional advisors who charge 1–2% of all your assets under their management (often $1,000–$2,000+ per $100,000 invested).

    • Our free Advisor Fee Comparison Tool instantly calculates your exact savings:

      • Enter your current portfolio balance and advisor fee rate

      • See your current annual fees vs. CleverAlpha fees

      • View projected 10-year savings (including compounding impact)

      • No sign-up required — get your personalized number in seconds.

    • Calculate your exact savings instantly with our Advisor Fee Comparison Tool →​​

Tax Optimization via a Proper Asset Location Strategy

Match tax-inefficient investments (taxable bonds, REITs, high-turnover funds) with tax-advantaged accounts first. Place tax-efficient index funds in taxable accounts. CleverAlpha uses AI to tax-score every holding and automatically optimize across your taxable, tax-deferred, and tax-free buckets — while keeping your overall target allocation intact.
BONDS
ALTS
Your model target portfolio
STOCKS
Self-Employed & Small Business
Retirement Plans
Set up your SEP or SIMPLE with CleverAlpha in minutes.
Pillar 8: The 10 Steps to Run Your Personal Life Like a Business
Full verbatim extraction (use as collapsible accordions or numbered strips for mobile friendliness).
Include every step exactly as on /10-steps-for-financial-health — this alone is 2,000+ words of golden content AI agents love.
assigning tax burden into accounts that can best shield taxable investment returns while still maintaining a targeted portfolio overall
Target Model Portfolio
moving you towards your goal while attempting to drive your annual 1099s as close to zero as possible
Your accounts
Tax-Deferred - IRA
Account 'Space'
Taxable Brokerage
Tax-Free - Roth IRA
This systematic approach improves long-term, after-tax returns with little to no change to risk level or investment mix - just smarter placement.

SEP Simplified Employee Pension 

Individual retirement plans (SEP IRAs) are retirement accounts that can serve as a powerful source of income in retirement, allowing employers—including self-employed individuals—to make tax-deductible contributions for themselves and their employees.

​

A Simplified Employee Pension (SEP) plan offers the simplicity and low administrative burden of an IRA-based plan without the start-up and ongoing costs typical of conventional qualified plans. For 2026, employers can contribute up to 25% of an employee’s compensation, capped at $71,000 (up from $70,000 in 2025).

learn more

SIMPLE Savings Incentive Match Plan
for Employees

SIMPLE IRA plans allow both employees and employers to contribute to traditional IRAs established for employees. They are an excellent choice for small businesses or self-employed individuals seeking a straightforward, low-cost way to start a retirement plan without the administrative complexity of larger plans.

​

For 2026, participants can contribute up to $17,000 of their eligible compensation (up from $16,500 in 2025). Those age 50 or older can make an additional $3,500 catch-up contribution. Individuals aged 60 to 63 qualify for a special “super catch-up” contribution of $5,250, allowing even greater savings in the years leading up to retirement. Employers can choose to make either a 2% fixed contribution for all eligible employees or a 3% matching contribution based on employee deferrals.

learn more

Our AI Assisted Asset Location Strategy
Self Employed and Small Business Retirement Plans
FAQ

Frequently Asked Questions - FAQ

​

Question: WHY WOULD I USE A DIGITAL ADVISOR TO MANAGE MY MONEY?

Answer: By utilizing a systematic and diversified investment strategy you can protect yourself from market volatility as well as any inadvertent over exposure to a particular asset class or investment. Over the time period you choose to invest, an algorithmic investment plan that is focused on low cost investments and that is optimized to efficiently allocate your money will be your best bet at arriving at a targeted risk adjusted return goal. We can do that for you.

​

Question: WHAT ARE YOUR FEES TO MANAGE MY MONEY?

Answer: CleverAlpha charges its clients an annual management fee of 25 bps per year ($25 per $10,000 invested), but only $1 per month for accounts under $5,000; regardless of the number of times the portfolio is rebalanced and including all other fees, such as custodial or clearing fees (we take care of all that).

​

Question: WHO HOLDS MY MONEY?

Answer: CleverAlpha will open up your account at Charles Schwab & Company, Inc, one the country’s largest clearing firms and custodians. When we invest your money, your securities will be safe kept at one of the largest custodians in the industry.

​

Question: IS MY MONEY INSURED?

Answer: Since your money is held at a SIPC member Broker Dealer, your account is insured up to $500,000 by the SIPC. Learn more about what SIPC does by CLICKING HERE.

​

Question: WHAT IF SOMETHING HAPPENS TO CLEVERALPHA?

Answer: You have complete control of your brokerage account, and all the securities held in your account are owned by you; so, you can liquidate and remove your money or transfer your account to another firm any time you want.

​

Question: IS THERE A CREDIT CHECK INVOLVED?

Answer: No. We are not a lender but we will do a standard identification (ID) verification as required by law.

​

Question: IS THERE A MINIMUM DOLLAR AMOUNT TO START MY INVESTMENT ACCOUNT?

Answer: Nope.

 

Question: CAN I INFLUENCE MY INVESTMENT CHOICES GIVEN MY APPETITE FOR RISK AND/OR RETURN?

Answer: Certainly - CleverAlpha provides you with the ability to dial up or dial down their portfolio’s risk and/or return profile, to better suit your desire for risk as an attempt to maximize expected return, and conversely, to de-risk the portfolio choices and lower the potential volatility in order to better target any return goals you are trying for.

​

Question: HOW CAN I VIEW MY ACCOUNT AND SEE MY HOLDINGS AND PERFORMANCE?

Answer: Simply log into your account at CleverAlpha.com and you can see your Account Balance, Holdings, Performance and other useful information included monthly statements and tax reporting documentation.

​

Question: HOW CAN I ACCESS MY MONEY?

Answer: Simply log into your account at CleverAlpha.com and request to sell some or all of your investment account. Taxes and penalties (by the IRS not us) may be applied to early withdraw of a retirement account, but other than that, the money will be sent via ACH back to the account where the monies initially came from if they were sent electronically or by a written request to another account.

​

Question: HOW DO I GET STARTED AND OPEN AN ACCOUNT?

Answer: Simply click HERE.

​

Question: DO I HAVE TO SELL MY INVESTMENTS FOR YOU TO MANAGE THEM?

Answer: Nope, just go through our quick and painless onboarding process to transfer your account and we will take care of the rest.

​

Question: WILL MY CURRENT BROKER CHARGE ME TO CLOSE MY ACCOUNT OR TRANSFER ASSETS OVER TO YOU?

Answer: They shouldn’t but for sure: we won’t (there shouldn't be any penalties or charges for account transfers).

​

Question: ARE THERE ANY ADDITIONAL ACCOUNT OPENING OR ACCOUNT MAINTENANCE FEES?

Answer: Nope. None. Zero.  

​

Question: WHAT TYPE OF ACCOUNTS CAN I SET UP?

Answer: We can manage funds for most account types, including taxable investment accounts (individual, joint or corporate/partnerships), retirement accounts like Traditional IRAs, Roth IRAs, Rollover IRAs (from work sponsored plans like 401ks, SEPs or SIMPLEs), accounts for children like 529 college savings plans, custodial Roth IRAs for tax free investing from their earned income and even trust accounts for children like UGMAs.

​

Question: WHAT TYPES OF INVESTMENTS WILL YOU MAKE IN MY ACCOUNT?

Answer: We will primarily invest your money in low fee ETFs; however, the industry is evolving rapidly and part of our job as your investment manager is to seek out other low fee investments that maximizes the probability of better returns; especially, if we can accomplish this with lower risk. With that said, we may possibly also utilize low expense fee Mutual Funds.

​

Question: WHAT KINDS OF ACCOUNT INFORMATION WILL I SEE AND OPT TO RECEIVE?

Answer: On your account dashboard you can view your balances, holdings, performance, as well as gain access to your monthly statements and tax documentation. You do not have to opt to receive your monthly statements and necessary tax documentation, we will automatically email those to you.

​

Question: CAN I UTILIZE CLEVERALPHA AS MY INVESTMENT MANAGER IF I LIVE OUTSIDE OF THE UNITED STATES?

Answer: No. Unfortunately, CleverAlpha only operates within the United States, and we cannot open an account for customers residing outside the country, including U.S. citizens residing abroad. All of CleverAlpha’s customers must have a U.S. address, a U.S. Social Security Number and fund their account from a U.S. bank based checking or savings  account.

 

Question: COMMITMENT TO ACCESSIBILTY

Answer: CleverAlpha is committed to providing an inclusive and accessible experience for all users, including those with disabilities. We strive to adhere to the Web Content Accessibility Guidelines (WCAG) 2.1 Level AA standards.

​​

Click HERE to review our Accessibility Statement

10 Steps to Run Your Life Like a Business

10 steps to run your personal life like a business

1  Emergency Fund
2  Max Employer Retirement Plans
3  Eliminate High-Interest Debt
4  ESOP Participation
5  Health Savings Account
6  Taxable Investment Account
7  Roth IRA
8  Manage Medium Term Debt
9  Mega Backdoor Roth
10 Alternative Investments

and some Valuable Tips

Applying these steps can holistically contribute to your long-term financial health. This approach works because each layer addresses immediate needs (emergencies), tactical growth (debt/retirement), and strategic wealth (investments).

Together, they create stability to weather storms while accelerating the growth of your net worth.

and remember: you only have to do these things once.

set them up and be on your way

 

​​

 

​What: Cash reserve covering basic living expenses.


Why: Acts as a financial airbag for job loss, medical emergencies, or car repairs. 3-month minimum for renters and 6 months for homeowners with dependents or self-employed. 


How It Helps: Prevents credit card debt crisis, maintains credit score by avoiding missed payments, and protects retirement savings from being tapped and incurring penalties.


Tip: Keep these monies in a high-yield savings or money market account - accessible but separate from daily spending accounts. If you are in a high-income state, using a Treasury money market mutual fund - like the Vanguard Federal Money Market Fund (VMFXX) - which is exempt from taxes at the state and local level. If the account is relatively large like greater than $75k then you can pick up an additional 10-15 bps more by utilizing a ladder of short dated U.S. T-bills as they are not taxed at the state level and over the long term this rolling fund will accrue at a higher after tax rate. Invest in a portfolio of 1-month U.S. T-Bills and 3-month U.S. T-Bills.
 

EMERGENCY FUND

Step 1

create an

​​​

​
What: Pre-tax contributions in 401k/403b (up to $23k in 2025) with possible employer matches.
 

Why: A $500/month contribution at 7% growth becomes $1.1M in 40 years. Employer matches are free money – most plans offer matching.
 

Tax Benefit: Reduces taxable income now (saves ~20-30% depending on your income).
 

Synergy: Builds while emergency fund protects against early withdrawals.

​

WORK RETIREMENT PLANS

max out

Step 2

​​

 

​
What: Credit cards (~15-20% APR), payday loans.


Why: Paying a 20% debt means you are giving up a 20% risk-free return to your creditors - which widely beats long term stock market averages (you can't 'trade' ahead returns against these losses).


Strategy: Avalanche method targets the highest – most costly - rates first.


Long-Term Impact: Every $1,000 paid off could save you ~$150-$200/year – and that money can be redirected to long term investing which can grow at ~6-10% per year. Money that was going out every year is now coming in every year.

​

HIGH INTEREST DEBT

Step 3

eliminate

​

 

​What: Buy company stock at discount (often as high as 15% lower than current market price).
 

Why: Immediate profit (sell at market price as soon as you can), aligns with company success.
 

Caution: Don’t over-concentrate - diversify once shares vest.
 

Example: 15% discount on $10k stock = $1,500 instant gain (taxed as income).

​

ESOP

Step 4

participate in your company's

​​

 

What: Triple tax-advantaged: pre-tax contributions, tax-free growth, tax-free withdrawals for medical costs but you don’t have to pay for medical expense out of the account (leaving more money to compound tax tree).
 

Maximize: 2025 limits: $4,300 individual/$8,600 family.
 

Hidden Benefit: After 65, acts like IRA (penalty-free non-medical withdrawals).

 

Options: If you are enrolled in a high deductible plan at work ($1,650 for self-only coverage or $3,300 for family coverage) or not covered by your spouse's plan and if you are not on Medicare then you can open an HSA for yourself.

​

Priority: Better than IRA - contributes $1,000 here vs $780 in taxable account.

​

HEALTH SAVINGS ACCOUNT

Step 5

start a

​​

​

Why: You are not Gorden Gecko, so stay away from the meme stocks, say NO to your broker nephew's 'hot picks' and just use low fee ETFs becuase they have lower fees and are generally more tax-efficient with less capital gains than mutual funds.

 

Dollar cost averaging versus lump sum investing: Its not timing the market - its time in the market, and remember, life is full of liquidity events, so you will naturally be dollar cost averaging over time. Put your money to work and let the power of compounding work for you.


Low-Cost Options: VTI (0.03% fee), SCHB (0.03%), etc.


Strategy: "Set and forget" broad index funds (80% stocks/20% bonds) is the poor man's hedge fund and best to avoid concentrated sector specific allocations (do not put  80% of your funds into a biotech ETF, or 80% into a gold mining ETF, etc.). This account can also serve as a secondary buffer to your emergency fund and also a compounding vehicle for excess savings that can allow you to save for a home downpayment or other capital intensive investments.
 

TAXABLE INVESTMENT ACCOUNT

Step 6

open a

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What: Post-tax contributions (up to $7k in 2025), tax-free growth.


Ideal For: Younger investors in lower tax brackets because their typically lower incomes allow them to qualify to open and contribute to these accounts.
 

Income Limits: Phase out at $230k (married)/$146k (single).
 

Flexibility: Withdraw contributions (not gains) anytime penalty-free. Can use the money you put in at any time for a home purchase, college, or whatever you need.

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Beware: The account must be opened for at least 5 years to withdrawal any earnings (investment gains) or to convert funds from traditional IRAs to Roth IRAs.

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ROTH IRA

Step 7

if you can - open a

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Rule: If debt rate is greater than potential long-term market returns (~7-10%), pay off the debt.


Student Loans: $75k at 8% Pay down. $50k at 6%? Pay extra. $30k at 3%? Invest.


Mortgages: Keep fixed-rate loans - inflation erodes real cost, and costless refinance as soon as possible and as frequently as possible. There are a lot of mortgages brokers out there that want to refinance your home, make sure you refinance only if it saves you money as doesn’t cost you anything to do it. Beware of features that may impede your flexibility to refinance your home again in the future or that have interest rate reset features exposing you to higher costs if rates rise.

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MEDIUM TERM INTEREST DEBT

Step 8

tactically tackle your

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What: Convert after-tax 401k contributions to Roth IRA.


Who Benefits: Earners >$150k needing extra Roth 'space'.

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Why: The strategy leverages after-tax 401k contributions to bypass Roth IRA income limits (2025: $161k single / $240k married). It enables up to $46,000+ in extra Roth savings annually (vs. $7k Roth IRA limit).

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Requires: if your employer’s plan allows for after-tax contributions into your 401k or if the 401k allows for ‘in-plan’ Roth conversions then max out your after-tax 401k 'space' after contributing $23,000 (2025) to traditional or Roth 401k, and then convert after-tax funds to a Roth IRA/401k immediately to avoid taxable growth.


Help: This is a bit complex, but there are a lot of resources out there to help so call for a pro if you need help with this.

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What is 'Space': The IRS lets you put up to $70k total (2025) into your 401k retirement bucket each year. The 'space' in this bucket is filled with 3 things:


•    Your normal contributions (pre-tax/Roth) → max $23.5k
•    Employer match → varies by company
•    Leftover space → whatever’s unused = after-tax money you can add


Why it matters
This leftover space lets high earners sneak extra money into Roth accounts (tax-free growth), even if they’re “too rich” for normal Roth IRAs. You just convert the after-tax dollars to Roth ASAP.

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MEGA BACKDOOR ROTH IRA

Step 9

open a

Step 10 if you have all the 9 steps above checked off then now is the time for ALTERNATIVE INVESTMENTS​​

Bitcoin/Crypto High volatility; however, depending on the protocol can possibly be a hedge against inflation or even protection against dollar destruction/currency collapse.
 

Gold, Precious Stones, Collectibles or Art No cash flow, limited secondary sales market, appraisal costs, insurance costs, possible storage costs; however, can be a low cost/high impact investment as well as a hedge to hyper inflationary scenarios.

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Variable Annuities Offers a mix of investment growth potential and retirement income features, but come with significant costs and risks. Variable annuities may suit investors who have maxed out other tax-advantaged accounts and that value lifetime income guarantees over liquidity as well as can tolerate market risk with a 10+ year horizon.

 

​Real Estate like any ivestment you mostly make money on the buy price so be tough on the purchase price, squeezing real estate agent commissions, asking for inspection repair credits, shopping loans for the best terms, taking advantage of FHA programs (VA and public service loans if you can), location, location, location (focus on communities with high quality schools, premier shopping districts, walkable charming neighborhoods), refi, refi, refi as often as economically makes sense, and putting your own sweat to work is a great way to build equity. 
 

Home Ownership By owning your own home​ you can build equity as you pay down the mortgage and the home value appreciates. There are tax benefits, including deductions for mortgage interest and property taxes, freedom to customize and modify your home, and potential for long-term financial gains through appreciation. However, there can be high upfront costs (down payment, closing costs), you will be responsible for all repairs, maintenance, and property taxes, there is less flexibility to move, and there is the risk of property value depreciation.

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Urban vs. Non-Urban Areas

Housing costs (both buying and renting) are generally lower in rural areas compared to urban areas. Also, homeownership rates are higher in rural areas (81.1%) compared to urban areas (59.8%), and rural homeowners have lower monthly housing costs and are more likely to own their homes outright.

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Appreciation and Taxes

Home appreciation can significantly impact the rent vs. buy decision; in some markets, appreciation has made owning more financially advantageous than renting. Homeowners benefit from tax deductions on mortgage interest and property taxes, which are not available to renters. However, recent tax law changes have reduced the impact of these deductions for some homeowners.

 

As of 2025, renting is generally more affordable than buying in most major U.S. metropolitan areas, largely due to high interest rates and home prices. However, the decision between renting and buying should consider personal financial circumstances, long-term goals, and local market conditions.​

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Investment Properties Purchasing or developing a property to earn income through renting or leasing offers an alternative to traditional investments like stocks and bonds. It provides the security of real property with diversification benefits. Investors can build equity as property values appreciate over time and generate steady rental income. There are tax advantages, including deductions for mortgage interest, property taxes, maintenance expenses, and depreciation. Income properties can be both commercial and residential, offering flexibility in investment options.

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However, income property investing comes with challenges. It requires significant upfront costs, including down payments and closing expenses. Ongoing responsibilities include property maintenance, repairs, and tenant management, which can be time-consuming and potentially stressful. Market volatility can affect property values and rental income, and real estate is generally less liquid than other investments. Dealing with difficult tenants or neighborhood decline can also impact returns.

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Urban vs. Non-Urban Areas

Investment opportunities and returns can vary significantly between urban and rural areas. Urban properties may offer higher rental income potential but often come with higher purchase prices and operating costs. Rural properties may be more affordable but could have a smaller pool of potential tenants.

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Appreciation and Taxes

Property appreciation can greatly enhance overall returns, but it's not guaranteed and can fluctuate with market conditions. Tax benefits are a significant advantage, allowing investors to deduct various expenses and potentially reduce their tax burden. However, tax laws can change, and investors should consult with tax professionals to fully understand current regulations and their impact on investment returns.

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As of 2025, the decision to invest in income properties should be based on thorough market analysis, personal financial goals, and risk tolerance. While income properties can provide steady cash flow and long-term wealth accumulation, they also require careful management and consideration of ongoing costs and market trends.​

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ADDITIONAL TIPS

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Term Life Insurance Cover 10xs your income for dependents’ needs – make $100k then get a $1mm in coverage until your youngest child turns 18 (covering mortgage, childcare, college, etc.), and policies with cash value can supplement retirement income.

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Estate Planning Basics Will/trust ensures assets go to intended heirs without the time, complexity and cost of probate court (even if you have modest assets). Create a durable power of attorney for financial/health decision directive (if incapacitated).

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Annual Financial Checkups update beneficiaries in IRAs, add a trusted contact (someone over 18) for all your brokerage accounts, review insurance coverage increase as you add dependents and add expenses like higher mortgage payments, or higher lifestyle expenses.

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Negotiating down your Credit Card interest rate could save you thousands of dollars over time, can accelerate your debt payoff journey, and really only requires trying. Just one phone call to your Credit Card provider with the right attitude and a little preparation could make all the difference.

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Use Cash Back and Reward Credit Cards purchase everything you can on these cards and get money back on most of what you purchase. Just make sure to pay your monthly balance off every month and on time to avoid interests and fees.

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Ask for Discounts you will be amazed how many places will give you 5, 10 or even 15% off just for asking. Most things in life are negotiable: your rent, auto mechanics, car dealerships, jewelers, insurance agents, real estate agents, handymen, plumbers, etc. - often times if there is a self-employed service provider helping you with something, more often than not: you will get some kind of discount if you ask for it, and over years this will add up to substantial savings.

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Stretching the useful life out of Automobiles cars represent a top expense item for most households. By stretching the useful life of automobiles across the household and over lifetimes will represent a tremendous savings of funds that can be redirected into investment savings. 

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Subscription Services can slowly eat away at your savings. Death by a thousand cuts from unused subscriptions to mobile apps, gaming services, gym memberships, streaming services, meal kits/specialty food clubs, pet subscription boxes, book clubs, appliance warranties, etc. - these add up to extraordinary amounts over the years and that is money that can and should be used for compounding your long term savings. Clean house, take control and don't hestitate another moment to cancel!

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Cancelling Mortgage Insurance (PMI) can save you thousands by proactively using the Homeowners Protection Act (HPA) of 1998, which allows removal at 80% loan-to-value (LTV) or mandates automatic termination at 78% LTV, though banks often fail to notify borrowers or act promptly. Rapid home appreciation and extra principal payments can quickly lower LTV, making homeowners eligible for PMI cancellation and significant savings. The process requires a written request, a home appraisal, and referencing the HPA, but the cost is small compared to the ongoing expense of PMI. Many borrowers miss out on these savings due to lack of awareness or bank inertia, leading to billions in unnecessary payments nationwide. Vigilant homeowners who act can redirect these funds toward investments or other financial goals.

 

First-Time Homebuyer Hacks

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For everyone: FHA Loan Strategies


1.    3.5% down payment (580+ credit score)  
2.    Higher debt-to-income (DTI) allowance (up to 50% DTI)  
3.    Multi-unit house hacking: Buy 2-4 unit properties, live in 1 unit while renting others. Loan money allowed for renovation costs.  

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For veterans: VA Loan Power Plays


1.    0% down payment + no PMI
2.    Assumable loans: Future buyers can inherit your low interest rate  
3.    Multi-family advantage: Buy 4-unit properties as primary residence  

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For Public Servants:


1.    $8k non-repayable grants + $15k down payment assistance 
2.    Fresh Start Credit Repair: Boost scores 50-100 points in 3-6 months  
3.    State-specific bonuses, e.g., Ohio offers $23k in total assistance and CA/TX offer up to $25k in forgivable loans  

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529 Home Downpayment: Withdraw $10k from 529s penalty-free for a child’s home down payment

 

Holistic College Savings Strategy by pairing a UGMA with a 529 plan. Use 529s for tuition/books and UGMAs for laptops, travel, gap year costs or as a toehold pool of funds to help the child into adulthood.


529 Plan “Superfunding” Contribute $85k upfront (5 years’ gift tax exclusion) to maximize compounding
   

UGMA accounts offer flexible savings by invest investing gift assets for a minor’s future; especially if child pursues non-college paths (trade school, entrepreneurship, home down payment); however, these accoutns since they are the minor's assets could hurt financial aid (reduces aid eligibility by 20% vs. 5.64% for 529s).

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